Seoul: The South Korean economy posted weaker-than-expected growth last year amid slowing export growth, sagging domestic demand, and a political crisis, central bank data showed Thursday. The country's real gross domestic product-a key measure of economic growth-increased 2 percent in 2024, according to preliminary data from the Bank of Korea (BOK).
According to Yonhap News Agency, the 2024 figure was lower than the central bank's forecast of a 2.2 percent expansion, though the growth accelerated from a 1.4 percent advance in 2023. Last year's growth was led by exports, which surged 6.9 percent from a year earlier, compared with a 3.5 percent on-year increase in 2023. Private spending rose 1.1 percent in 2024, slower than a 1.8 percent growth the previous year. Facility investment gained 1.8 percent, while construction investment fell 2.7 percent.
In the fourth quarter of 2024, Asia's fourth-largest economy advanced 0.1 percent on-quarter, far lower than the BOK's forecast of a 0.4 percent growth. On a yearly basis, the economy grew 1.2 percent in the fourth quarter, slowing from the previous quarter's 1.5 percent gain. The weaker growth came as President Yoon Suk Yeol declared martial law on Dec. 3, leading to his subsequent impeachment. Yoon was arrested earlier this month and has come under investigation on charges of leading an insurrection and committing abuse of power.
In the fourth quarter, exports inched up 0.3 percent from three months earlier, while imports shed 0.1 percent. Private consumption added 0.2 percent on-quarter, and government spending rose 0.5 percent. Facility investment also climbed 1.6 percent, but construction investment dropped 3.2 percent, the data showed.
South Korea had been on an economic recovery track at the beginning of 2024, but momentum weakened as the growth of exports slowed and domestic demand remained in the doldrums. The economy expanded 1.3 percent from three months earlier in the first quarter but contracted 0.2 percent in the second quarter before barely growing 0.1 percent in the third quarter. The BOK earlier presented a 1.9 percent growth outlook for the South Korean economy in 2025, which is widely expected to be lowered further.